Issuance of Australian Government Securities

4 May 2016

This notice provides details of planned issuance of Australian Government Securities by the Australian Office of Financial Management (AOFM) on behalf of the Australian Government over the remainder of the current financial year (that is, the period to 30 June 2016) and during the 2016-17 financial year (1 July 2016 to 30 June 2017).

Treasury Bonds

Subject to market conditions a new 21 May 2028 Treasury Bond is planned to be issued via syndication in the week beginning 9 May 2016. Citi, Commonwealth Bank of Australia, Deutsche Bank AG, and UBS AG Australia Branch will act as Joint-Lead Managers for the issue. In conjunction with the syndicate, the AOFM will release further information regarding the timing and conduct of the issue.

Treasury Bond tenders totalling around $2 billion each week will be held during the remainder of 2015‑16 and into 2016-17.

Treasury Bond issuance in 2016-17 is expected to be around $90 billion. After accounting for maturities of $21 billion this represents net issuance of $69 billion.

In addition to regular tenders, it is planned to establish new bond lines with the following maturities via syndication during 2016-17:

  • 21 December 2021; and
  • 21 November 2028 (planned to be issued during calendar 2017).

A further yield curve extension, which would not occur before October 2016, remains under consideration. Further guidance on timing and other details would be announced with several weeks’ notice.

As per established practice, details of the bond lines and amounts to be offered via tender in a particular week will be announced at noon on the preceding Friday.

Treasury Bond Conversion Tenders

To commence after July 2016, the AOFM is planning to conduct regular Treasury Bond conversion tenders. These tenders will provide holders of short-dated Treasury Bonds the opportunity to convert their holdings into holdings of other nominated Treasury Bonds. This would assist the AOFM in its cash management task around the time of bond maturities and contribute to an orderly and efficient Treasury Bond market.

The AOFM is seeking feedback on this proposal, including on:

  • possible formats for conversion tenders;
  • suggested ranges for the maturity of Treasury Bonds to be acquired and offered; and
  • the timing and frequency of conversion tenders.

Please provide feedback to conversion@aofm.gov.au.

Treasury Indexed Bonds

Over the remainder of the current financial year, four tenders for the issue of Treasury Indexed Bonds (TIBs) are planned. Total issuance for the year is expected to be around $4 billion in face value terms.

Issuance of Treasury Indexed Bonds in 2016-17 via tender is expected to be around $3 billion in face value terms. Two tenders for the issue of Treasury Indexed Bonds of at least $100 million each will be conducted in most months.

In addition to regular tenders, and subject to market conditions, consideration will be given to issuing a new TIB maturing in 2027, during calendar 2017.

Treasury Notes

Treasury Notes are a short-term discount security primarily used for within-year financing. The volume of Treasury Notes on issue varies depending on the flows of Australian Government receipts and expenditures.

Last updated: 4 May 2016